it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> come to "daybreak: europe."

more diplomacy, president biden may visit israel and the coming days alongside secretary of state antony blinken who just met with leaders over the weekend. gaza continues to brace for a ground offensive. u.s. says it held back channel talks with iran warning about escalating the israel and hamas conflict. plus, investors on the sidelines, market study as geopolitical risks wayne. the dollar slipping while oil is higher. a lot of the chaos we saw, and the volatility in the bond market seems to be abating. the theory is simile that you are seeing maybe things calming down and that's not the read i recommend you take. i think it's more investors hopping onto the sidelines a very cautious approach as we are waiting for a few more details

about what the war looks like. is this contained or do you see a broader regional conflict into the ripple effects into oil will have repercussions for the stock market and bond market. until there is that clarity, which lacks for the federal reserve and other banks around the world. until we get that, you will see a light volume defensive positioning which translates to green on the screen. ftse 100 futures outperforming, higher by 1/10 4/10 of 1%. -- 4/10 of 1%. here is your equity picture when it comes to future training. light volume, some caution around the world. less look at asian markets, those are the markets open right now and they are broadly risk lower and i think that's something that is crucial. we are getting a lot of lines on geopolitical volatility and also out of the pboc as well and that will have a read through into

the stock market. the asia-pacific index is down by about 9/10 of 1% had the hang seng pulling back as well. the pboc is offering the most cash support going back to 2020. how much support does the economy need before we see investors truly panicking about needing that kind of stimulus to stay afloat? the nikkei taking on the chin, down about 1.9%. we are still far from the 150 level, that creates the currency intervention story. there is a lot we will dive into when it comes to china. it is the cross asset volatility we are still paying attention to. most beautifully i think seen in currency risk. aussie-yen is where it is that. that's a function of the moves in the oil space. the most call volumes. euro-dollar higher by about 1/10

of 1%. a lot of this is the function of the volatility in the commodities space even though on the surface brent crude is only shy of $91 per barrel. i think the call options are freaking everyone out. let's talk about the shekel as well. we are looking at moves from israel and specifically the bank of israel and how much support they have to do, how money fx infusions they have to do with cash reserves. for now, it seems a little muted but dollar shekel, 397. we will keep you apprised of the moves. let's go back to the top story, the massive repercussions for geopolitics and markets alike. it is rarely troops continue to a nasa near gaza ahead of an unexpected ground offensive targeting hamas militants after israel ordered more than one million palestinians, almost half of the territory's population, to move south. according to the israeli army, more than 600,000 have done so so far. the you in agency for refugees -- un agency for refugees says

gaza is facing a humanitarian castor fee. >> gaza is running out of water and electricity. gaza is being struggled and it seems like the war has lost its humanity. if we look at the issue of water , we all know water is life and gaza is running out of water. gaza is running out of life. kriti: israel's prime minister has vowed to destroy hamas in response to the militant groups attack last week. israel's retaliatory strikes have crushed under the buildings -- hundreds of buildings in gaza. >> we work around the clock. teamwork, a united front. the unity within us conveys a clear message to the people,

the enemy in the world. if hamas that we would fall apart, no. we will tear hamas apart. kriti: patrick has the latest on iran and yousef has geopolitics, but we start with oliver in tel aviv. what can we expect when it comes to the ground offensive in israel? oliver: there was a little bit of ambiguity going into the weekend but really over the weekend, it's not a question of if but when. the israeli defense forces, the military has said there will be a land, sea, and air component to the next stage of the war. they have established evacuation corridors over the weekend, about six hours on saturday, to allow for civilians to move from the north to the south. and again for a few hours on sunday. the situation in gaza because -- gaza is extremely dire.

no aid is able to come in. water and electricity in extremely short supply. this as authorities say 2600 people are dead and thousands and thousands injured. hospitals overrun. the figure in israel, mostly killed on saturday and mostly civilians, 1400. this comes as there are more skirmishes on the lebanese border in the north, rockets fired in either direction. dead on both sides. at least one israeli soldier and a journalist as well. this comes as we have a second aircraft carrier group from the united states moving to the eastern mediterranean. again, very conscious of deterrence and spillover. kriti: you mentioned the carrier groups, a lot of people are talking about just what american buildup of the military looks like, how much support is too much support? i want to bring you some sound from what president biden said when he was asked, our troops on the ground necessary? >> can you foresee u.s. troops

in combat in this new middle east war? >> i don't think that's necessary. israel has one of the finest fighting forces and i guarantee we will provide every thing they need. kriti: that's just one of the things president biden has commented. what else has come out of the u.s. administration? oliver: biden also warning about a prolonged occupation in gaza. chuck schumer, mitt romney, five senators from the u.s. in tel aviv yesterday at a tail -- at a television conference delayed by an air siren. chuck schumer said there's been no demand, no ask for any direct military involvement from the united states by israelis you also have antony blinken here today and he's been to egypt, to the uae, saudi arabia, qatar, rain, jordan, talking to the

leaders, trying to back channel with the iranians as well and trying to prevent escalation as one of the main concerns but also get aid into gaza and to deal with a hostage situation, or than 150 people according to the numbers we have. we understand we may get an opening at the border to egypt that would allow some aid to come in and allow some foreigners to come out. but we should say, mitt romney in his speech last night here in tel aviv saying all of the consequences of this and the horrible images out of gaza are the fault of hamas. that might be his perspective, that will certainly not be the perspective of iran, hezbollah and many neighboring states, where you've seen intense pressure on leaders and complicates the equation and ups the possibility of escalation. kriti: the rhetoric you are seeing out of the united states right now, especially as the gop

is quite fight it, is stark. florida governor ron desantis mckeen controversial comments over the weekend. oliver crook, thank you for your report. there are back channel talks being held with iran in recent days according to national security advisor jake sullivan. he is warning the country against escalating the conflict. joining us is patrick sykes out of istanbul. the risk of iran intervening has not been met with a ton of welcome, not even from the u.s. or arabian peers. talk about what we know about the risk. patrick: i think oliver is right about that, the different perception from the region itself. iran's message to the u.s. has been you are calling for restraint from everyone in the region but at the same time you are sending aircraft carriers and helping to arm israel.

at the same time, they are warning that if this am a what they call war crimes in gaza, continue, the situation could get out of control. so far they are not spelling out what that could look like. they are leaving some ambiguity about who might get involved and how, if at all, iran could get involved. would it be through proxies, would it be directly. i think that's the next question. at the same time, blinken has been doing his diplomatic tour and the armenian foreign minister has been doing the same, sort of parallel diplomatic trek the past few days. the only spot where they crossed over was qatar. that might have been a point where some of the diplomatic back channeling went on. it's also a country we know is involved in recent prisoner swap's that happened between the

u.s. and iran. it is an active, diplomatic channel. the foreign minister back in tehran and we will see what he's got to say later today. kriti: a full effort from the usi to de-escalate. patrick sykes in istanbul explaining to us the iran a side of the equation. i want to continue on that thing and talk about hezbollah specifically raising the prospects of a wider regional conflict. yousef, i want to start with has blood, you've seen the increasing violence and the northern border with lebanon hitting newswires all over the world. what is the latest news? yousef: we've heard some of the casualties reported and the exchange of fire, but the thing is, in a historical context, this is still not a meaningful escalation. it was in what we've come to

learn about this part of the world, this is considered relatively normal or within the goalposts of what is considered normal for reactions from both sides. the iranians and wider gulf and middle east will be watching closely on whether we will get a ground incursion from israeli troops into the gaza strip. will that trigger a meaningful escalation from hezbollah in the south of lebanon? will they go all out? we know they've got thousands of missiles and other weaponry ready to go at a moments notice. whenever that green light is given from the iranian side and hamas, first and foremost, and hezbollah, you could see the kind of escalation. i caught up with control risks about an hour ago and they made it clear that the gulf leaders, even iran, i don't want this to spin out of control. they have every incentive to

de-escalate even after all of the lives that have been lost on both sides of the border. with that in mind, the u.s. secretary of state has a lot of momentum to take to tel aviv in his conversations with both sides to see if we can find a way out of this. kriti: speaking of finding a way out, egypt, from a lot of sources, has said this is may be the only option for egypt to get involved. over the weekend, some talk about other a debt agreement would be made to convince egypt, it is economically struggling to take on more refugees. that has not been confirmed but reported to be in talks. where does egypt stand at a time when the egyptian president is not supporting israel's response? yousef: egypt is in a fragile position and they made it clear they still believe the two state solution is the only way to go about this. and that aid needs to get into the gaza strip.

they are likely to work with the u.s. and other partners to open the border, the southern intra-point -- southern entry point. we can see trucks lined up waiting to get in. the u.s. will sit down to see if they can agree on a framework on when and how the aide can get in. then you look at bigger ideas and solutions, the egyptians want to host an international conference, get regional leaders in, global heads of state as well to find a more lasting solution to what we've seen in the last 10 days in particular. kriti: we will see how this plays out. yousef gamal el-din reporting for us from dubai. still ahead, we are speaking with the former director general of israeli ministry of foreign

affairs. later, a specialist shares his outlook on how geopolitical tensions translate to global markets. stick with us, interviews you don't want to miss. this is bloomberg. ♪ i'd like to thank stitch fix for always making me look great. for taking care of the shopping... so i can take care of this. i'd like to thank my stylist, now getting dressed is so easy. thanks for getting my fit just right. for finding me looks that work for me and my budget. for finding me my favorite pair of jeans. i'd like to thank stitch fix because, i look good. thanks stitch fix, you just get me. -they get me. -you just get me. and they'll get you, too. take your style quiz today.

kriti: sources have told bloomberg president biden may visit israel soon, adding to the u.s. diplomatic push to contain the war with hamas, after the israeli prime minister vowed to destroy hamas as reparations for an expected ground invasion in gaza continued joining us is the former director of the israeli ministry of foreign affairs and former israeli diplomat, as well as yousef gamal el-din joining us. we will start with the two state solution, you have been an

advocate for this going back to your time serving in israel as well. how realistic is the solution now? >> it is set to say but it is more realistic than before this horrible attack of october 7. i am one of the people who preached that the war is unsustainable. and no idea what and when the situation will explode. i do think violence on the palestinian side would be a game changer. but it so happened that the advance of the seventh of october, a huge game changer. everything is something from the beginning and i think other

players look different. israel looks weaker, the west bank looks different. the region looks different. we are starting diplomatically from a . -- from a new line. yousef: that's what we want to build on, just to flesh out the many years of experience you had at the foreign ministry all the way back to 2000. what is the sequence of events from this point onward that could get us to a new form of two state solution. what kind of work can a u.s. secretary of state do to get a cease fire and get everybody to talk about an enduring peace? >> i think the big change is the

theory in israel, the constant in israel, supported by netanyahu, that we can crush the hopes of the palestinians. this is bringing back diplomacy into the game diplomacy was not part of the game in the last 10 years. now it is coming back. i don't know how things will exactly happen. i know israel is going to crush hamas. israel is trying to bring a different ruler to the gaza strip. i don't know who the ruler will be but i know that the removed

diplomacy [indiscernible] kriti: what does this conflict need right now? what support doesn't need, who can come to this aid? there's been a lot of talk about egypt's role. how reliable that egypt will be the solution not only for the humanitarian piece but diplomacy with israel? alon: when i said the world is a game changer, one of the things is israel-egypt. we base our security on egypt. egypt was not a friend, egypt was an ally. what is happening now in gaza is a rift between israel and egypt

that the role of egyptians in the region will change completely and even if it sounds like a nightmare for israelis, we might lose egypt if we push too much. if we push the palestinian problem into egypt this is very dangerous and we have to be very sensitive here. yousef: we are tying to figure out what will happen in the next few hours and to what extent, or how deep the israeli defense force is willing to go into the gaza strip and at what cost. what do you think is going to happen and are we going to see original flareup where hezbollah and iran and others maybe come in? alon: first, regarding the military, i think there is a consensus in israeli leadership and public that hamas is to be

crushed. no matter how it will be done, the removing of hamas's control over the population of gaza is going to be achieved if it is by air, by land, and there are many possibilities. it might take a long period of time could i don't think we should look at the next few hours as critical because removing somebody from power, over 20 years, is a lot. kriti: it certainly is. i am sorry, we are out of time but we really appreciate your insight. the former director general of the israeli ministry of foreign affairs and a former israeli diplomat as well. thank you for your time, as well as yousef gamal el-din. plenty of analysis ahead.

this is bloomberg. ♪

kriti: welcome back. i want to get a quick check on the markets. we know the geopolitical situation around the world is getting more tense. you can see it whatever way you want to look at it but i want you to get a quick check on the markets, how the middle eastern markets closed yesterday. we are still 30 minutes away from middle eastern markets opening this morning. you are seeing the israeli stock market down about 3.6%. the saudi index also falling about 4/10 of 1%. the question is how much spill over, how much exposure do you want to middle eastern markets? the egyptian index was higher

about 1.6%, but context is important, under a lot of pressure the last couple of days so the bounceback does not necessarily indicate positive fundamentals. it does indicate active trading happening. we have an eye on qatar as well, closing yesterday unchanged but everything might change again in about 30 minutes. a quick check on the shekel, seeing movement. the bank of israel is trying to support the currency, but slight weakness in favor of the greenback. we will keep you apprised of the markets and what the trades look like in about 30 minutes time. stay with us. this is bloomberg. ♪ nice footwork. man, you're lucky, watching live sports never used to be this easy. now you can stream all your games like it's nothing. yes! [ cheers ] yeah! woho! running up and down that field looks tough. it's a pitch.

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when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. kriti: good morning, welcome back to "daybreak: europe."

more diplomacy. president biden may visit israel in the coming days alongside secretary of state antony blinken, who met with arab leaders over the weekend. gaza continues to brace for a ground offensive. the u.s. says it has held channel talks with iran morning at -- warning against escalating the conflict. more aid is being called for in gaza. poland's opposition looks on track for a majority, and election upset that could and eight years outside the european mainstream. let's get a quick check on the markets, you're seeing some green on the screen. in the last 30 minutes you've seen some green get pared back. this is important because let me walk you through the mentality. simply this idea that on the surface it looks like the geopolitical premium is waning. that me warn you against that

narrative, that's not exactly what's happening. you're seeing defensive trade and volume much lower across futures contracts even though last week you saw a lot of active trading and surges across the board. what is important to keep in mind is this is a defensive trade because a lot of fun flows are pulling out of asia and the middle east. where'd you go but to american and european assets? at the same time, you're going to see a little bit of defensive trade and paring back some losses we saw last week, which brings me to the asian trade. by comparison, whereas you are seeing green on futures trading, asia is seeing a pullback. the broader region down about 9/10 of 1%, hang seng down about six tense of 1% despite the pboc talking about increasing liquidity, increasing more cash deposits, the most since 2020. i think the concern is why do we need that kind of support in the first place? that is having the opposite effect when it comes to the stock market hit the nikkei taking a hit, down about 2%.

dollar-yen is weaker. some strength in the japanese yen, counterintuitive, we are pulling back from the 150 level that a lot are associating with the boj intervening pit the bond market still matters. monetary policy in the face of geopolitics, is it hawkish or dovish? we don't know, we are seeing some stained -- strange cross cards. brent crude is about $91 a barrel. the 10 year yield higher as well but that is not translating into the dollar. dollar weakness seems to be the story. when you see crosscurrents that don't make sense, it means that trading is pairing the big moves from last week. that's something we will be watching. our top story, israeli troops continue to amass near gaza ahead of an expected ground

offensive targeting hamas militants after israel ordered more than one million palestinians, almost half the territory's population, to move south. according to the israeli army, more than 600,000 have done so so far. the un agency for palestinian refugees says gaza is facing unprecedented humanitarian catastrophe. >> gaza is running out of water and electricity. in fact, gaza is being straggled and it seems the war has lost its humanity. if we look at the issue of water, we know water is life, and does is running out of water. -- gaza is running out of water. kriti: sources have told bloomberg president biden may visit israel soon, adding to the u.s. diplomatic push after

secretary of state antony blinken met with arab leaders over the weekend. the president spoke with cbs on the prospect of sending troops to the region. >> can you foresee u.s. troops in combat in this new middle east war? >> i don't think that's necessary. israel has one of the finest fighting forces. we will provide them everything they need. kriti: joining us now is oliver crook in tel aviv. walk us through the latest, what can we expect on the ground offensive and the u.s. diplomatic efforts? oliver: over the weekend we heard from the israelis kind of detailing more of what their plans were on this potential invasion and they said it will include a ground, air and sea segment that has been widely anticipated. there are hundreds of thousands of israeli troops amassing by the border of gaza. we also understand today they have established another evacuation corridor from 8:00 a.m. until noon, which means

basically they will not drop any bombs on certain avenues to encourage civilians to leave the northern part of gaza and move south. we have from palestinian authorities when he 600 people are dead in gaza since the bombing began over a week ago. we have the figure from the israelis, about 1400 that died mostly from last saturday, not this saturday but last week. the issue in gaza, no aid is getting in. water, electricity, internet, all of these things in short supply. blinken is on tour, he's been to saudi arabia, uae, qatar, bahrain, jordan, egypt, to talk about a number of things good he wants to reduce escalation, getting aid in and dealing with hostages. we don't have a lot of information about hostages. they are keeping negotiations mostly on back channels. in terms of aid, there may be an opening at the crossing in the south part of gaza into egypt. aid may able to get in and

foreigners may be able to get out. escalation, it is a two-pronged approach. they needed to talk to the iranians and hezbollah and constituent parts, but also it is something blinken mentioned when he was in tel aviv, israel needs to be careful about how they go about this, how they go about dismantling hamas because this is being observed everywhere in the world and certainly in the arab world, you see hundreds of thousands of people in the streets protesting so there is a high risk of escalation. there's been a bit of fighting in the north, nothing substantial, but the u.s. is sending a second aircraft carrier group to the mediterranean, showing the deterrence and the fear of possibility of escalation. kriti: there is always the going to be the military deterrence and diplomatic as well. this trip for president biden and antony blinken and will -- as well. oliver, thank you for your reporting. let's talk about back channel

talks. the u.s. has said they have had them with iran, warning tehran against escalating the conflict. patrick sykes joins us what is washington actually saying about iran threatening that if the ground offensive takes place, they will have to get involved? what is washington's take? patrick: i think the consistent message from the u.s. is we don't want to see this escalate into a regional war, let alone a hot war with iran directly involved. iran for its part is pointing to the u.s. sending that military aid and aircraft carriers into the region and saying you are calling for restraint but at the same time you are very much involved in this conflict. iran not saying it is doing equivalent things, but on a diplomatic level it is doing tours, making contacts at the weekend. the foreign minister saying --

meeting with the leader of hamas and hezbollah in lebanon. those contacts are the kind of things that will be worrying policymakers in the u.s.. i ran not indicating what it would do, how it would respond if what he calls war crimes in gaza are allowed to continue but the context i think will be cause for concern for washington and many elsewhere. kriti: patrick sykes with that crucial update. there are so many players. the iran situation complicates it even more. thank you for the update. i want to check again on how middle eastern rockets closed yesterday. just -- middle eastern markets closed yesterday. you're seeing the funds coming out of middle eastern markets. the t 35 down about 1.6% -- 3.6%.

context is everything. all of last week you saw fund flows pull out of egypt, so it speaks to the idea of a little bounceback that is not necessarily illustrative of the fundamentals around egypt right now. that is one piece of it, we will get updated trading data in about 20 minutes time, and 8:00 a.m. u.k. time, the israeli index opens. let's get more from john, who joins me this morning. what is the geopolitical risk premium here and where is it? john: for the moment, i would say it is not huge. first you should recall it is a human tragedy that should not be dismissed, historically, equities have largely ignored geopolitical conflict. however, serious escalation, previous experience has shown

the impact on the fundamentals on europe and u.s. and corporate profit has been limited. if you take one example and you shouldn't compare, of course, but one example is the second world war. from 1939 through 1945, the dow jones rose by nearly 50%. as i said before, there is no comparison here, but for the moment, it is not the impact, it is the relationship between the geopolitical and markets is not huge. kriti: it seems like that on the surface but what about the ripple effects? the idea that markets are gonna be paying a lot of attention to central banks. do they hike with geopolitical risk on the horizon and by extension, to the markets price

in a more dovish tone from monetary policy? john: the silverlining from the recent surge in yield may reduce the need for more rate hikes. last week they tried to flight to safety and quality on the gradual shift on the fed messaging, it helped the rebound of bonds. i would say it might help the fed not to hike more because they are -- there are global uncertainties on all the assets. of course is way too early to say. they are data dependent, but they are also geopolitical dependent if there is escalation in the region. kriti: talk to us about the oil story. i feel like that is where this will translate the best. it wasn't too long ago, before

the geopolitical risks, we were talking about $100 wheel. now you see a pullback, inching back toward the $100 barrel. the ripple effects of $100 oil off of what has clearly been a magnified affect based on i think tighter supplies expected off of potential sections off of iran. there are domino effects for talk to us about $100 oil roiling markets around the world. john: firstly i should say that we think the geopolitical tensions could escalate globally. there was a question and i think this is the key for tell you if the dollar is going to go to $100 per barrel, is iran's involvement. the other key is what opec-plus will do. during the global oil crisis in 1973, the influence of opec was

less down today. so far no impact to global oil supply. we say that in the coming days, the involvement of iran is the key answer to your question. for the moment, we see there is no involvement so i don't see the dollar go up close to $100 and it should stay there and be very volatile in the coming days. kriti: already getting a hint of that, what used to be a bullish trend on the greenback has abated ever so slightly. john talking there about how geopolitics translates to the markets. thank you for your analysis. we will explore the theme even more and navigate or -- more geopolitical risks. a guest joins us later to discuss exactly that at 7:30

a.m. london time to plus our interview of the morning, the israeli ambassador to the eu and nato at 9:30 a.m. u.k. time. plenty more had on the program. don't go anywhere. this is bloomberg. ♪

kriti: welcome back to "bloomberg daybreak: europe." on to other geopolitics. poland, those lottie gaining against the euro after an exit poll shows that pro eu is set for a victory. we have more on the story. run us through the latest in poland, are we headed back to the eu mainstream? >> indeed, it seems like that's where we are headed. based on an exit poll we got

last night, polish pro eu opposition is on course to take power after the selection. if not going to be easy. we are still waiting for election results, which are now being delayed due to the very high turnout. it is a record high, 73%. some people were queing until after midnight to cast votes. because of that the results are delayed. based on the exit poll, we can say that the populist party will slightly be ousted after two terms in the government and the pro e.u. party is likely to get in. it won't be immediate but it means a huge change for poland because under the populist law

and justice party, poland has been denied aid from the eu. what we will probably see is a much more tone and relations with the eu which is a positive sign for poland and the eu. kriti: the move you will be seeing off of this if it comes through is important. i believe the official results are due by tuesday. a lot of analysts saying it is a liquidity push, if you unlock i think you said 35 billion euros from the eu. thank you for that analysis plenty more ahead, stick with us. this is bloomberg. ♪

kriti: welcome back.

the u.s. is said to be planning to further tighten measures stricking beijing's excess to advance semiconductors and chipmaking gear. jill, this has been announced time and time again and somehow there are still loopholes what do u.s. officials do about it? jill: i think there are couple of things to keep in mind. first of all, with the restrictions announced last year, those happened without key signoff on some major u.s. allies including japan and the netherlands. manufacturers in those countries are still allowed to sell equipment to chinese chipmakers. the other thing is this is within the context of just a few weeks ago, bloomberg broke down the latest huawei phone and showed they were able to create advanced chip technology or use advanced chip technology i think the u.s. didn't think they would get access to. all of that informs the context

of why we are expecting to see these new chip restrictions. a lot of it comes down to putting on new export controls that may restrict the ability of overseas manufacturers to sell to certain chinese companies on a u.s. list unless they get specific approvals to do so. the other part i think is also just restricting the ability of some firms to gain access to technologies that would be artificial intelligence. that's what the u.s. is looking to do. we will have to wait for a formal announcement before we get a ton of detail. i'm sure china will have some pushback, considering they have's -- they have consistently said the u.s. is endangering global supply chains and creating risk. but at this point the u.s. is looking at the new huawei phone and investigating what happened. they are seeing limitations to the restrictions to plug some of

those gaps. kriti: let's see how successful they are. you said the other companies are dealing with it, asml reporting earnings on wednesday. the dutch equipment maker for really all of the chip equipment for the world. thank you, jill. when i think china i also think about u.s. exposure to china and a big part of the story is bank earnings. which we know j.p. morgan reported another quarter of record that interest income and boosted its forecast for the year on friday. we are not done with earnings stories. joining us is charlie wells. talk about what stood out from friday's reports. charlie: going into friday there had been so much negativity around banks. we've seen bank stocks perform very poorly this year aside from j.p. morgan. the bank index down about 25% in a lot of concerns about what higher for longer could mean for banks. when you look at friday, there was a huge boost in the interest

income for j.p. morgan and wells fargo and citigroup, which also reported friday, some traders there have their best third quarter in at least eight years. at the same time, jamie dimon warning that the bank was over earning in some areas and saw a normalization ahead. kriti: often we look at jp morgan we say they are the exception to the rule and nothing applies here, get we've got goldman and bank of america, very different banks with different strategies. what do we expect? charlie: we are looking to see expectations amid higher fees coming in from equities underwriting for goldman but not a lot of other good news out of the investment banking side. bank of america will be interesting to watch because their share has been underperforming this year and bloomberg had a great story out last week about some of their long dated treasuries, the bond portfolio they have. have a lot of exposure to these you -- low yielding and

low-priced bonds that could mean surprises. kriti: bond volatility two weeks ago did not serve bank of america although they made a long-term bet on the housing market which made sense if the volatility didn't get in the way. charlie wells, thank you for joining us this morning. before i let you guys go, i want to talk about a chart that caught my eye. that is going to be on egypt. we are going to bring it back to the geopolitical story but i want to talk about how it is affecting emerging-market trades specifically. the five-year credit default swaps, the cost it takes to ensure against an egyptian sovereign default. going back at 10 or 12 years, the egyptian risk has slowly risen and rented -- and risen. art of that is food prices, egypt is part of the breadbasket of the world. when you see the higher wheat prices coming off the wharton

ukraine, egypt will be directly impacted not to mention their own debt issues with the imf and world bank. notice the cds has actually spiked but not to the levels we saw coming off of the food inflation. i think that is significant because that is where a lot of people are expecting the next pain point in the em sovereign debt world to be. i will leave you with this chart. markets today starts in a few moments. they will take you through the european market open. stick with us. ? -- this is bloomberg. ♪

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